Worst Case Scenario!! – Fiduciary Broker Vlog #7

Ep7

How is an estate Administrator to deal with a Probate involving catastrophic loss?

Hi, I’m Dan Collins – a California licensed real estate broker serving Napa and Sonoma Counties with expertise in real property matters involving Probates and Trusts. I am also a California licensed general contractor.  If you have found yourself tasked with being an Executor administering a Probate that has been involved in a catastrophic loss event, I can help you effectively execute your duties that attorneys do not help you with. To learn more, please visit my website: probate-realtor.biz

Today’s video is called “Worst Case Scenario”.  What do you do if you find yourself as a Probate personal representative when the estate has incurred a catastrophic loss?  And, what to do when the catastrophic event also results in the deceased’s last will being lost?  I was inspired to address this topic of estates involved in catastrophic loss events from last month’s wine country fires in Napa and Sonoma counties that destroyed over 8,400 structures and reportedly killed 42 people.

If you have been named as a personal Representative of a Probate for a deceased’s estate from the California wine country which suffered a catastrophic loss; whether that person died just before, during or, as a victim of the fire, you have a far more complex task than would occur in administering an estate where the assets were undamaged and the last will was intact and available to file with the Court.

Missing wills raise all sorts of interesting legal issues which often turn on the specific facts and circumstances. If a will was lost in a wildfire, the Personal Representative may have the option of submitting a photo or scanned copy of a will to be admitted for probate.  What happens if there is no photo or scanned copy?  If the only copies were destroyed in a fire?

Those questions are matters of law, and I am not an attorney.  But I will be interviewing attorney Mike Hackard of Hackard Law this week to discuss the subject of lost wills in the 2017 wine country wildfires, so we can explore the practical and legal details in greater depth.

Generally, the insurance on your residence will pay toward repairing or replacing your home in case of damage from a covered peril such as fire. The contents of your house should also be covered in case of damage or loss from fire. However, some perils may not be covered. For example, flood damage may not be covered if your house is in a floodplain. But fire is generally a covered loss.

Even if a catastrophic loss is covered, that doesn’t mean that becoming whole again will be simple or easy.  As a California licensed general contractor, I am conversant about the potential challenges of processing insured loss claims when there are catastrophic events. The reason is because I was involved in construction projects after both the 1989 Loma Prieto earthquake and the Oakland fire storm of 1991. Based on my experience, what is likely to happen in Napa and Sonoma is that the demand for construction materials and labor to  replace over 8,000 structures in such a small geographic area will surely result in inflated costs.  And that means Personal Representatives who are charged with administering a probate in the affected areas of Napa and Sonoma wine country will likely be at a great disadvantage.  (As an aside, that is especially true if they do not reside near the county where they are tasked with administering the probate.)  If a Representative or Administrator is not knowledgeable in the areas of law, insurance or construction, the chances of receiving equitable treatment are very low.  I would not advise going down this road alone.  You will need qualified and expert assistance.

There are a lot of nuances to the law and quite a lot to unpack here.  If you want to know more about what to do in a worst-case scenario when you’re the administrator of an estate involving a catastrophic loss, please join me in this week’s podcast with trust litigator Mike Hackard of Hackard Law where we will discuss in great detail the areas of equitable treatment for estate administrators in the affected areas of the Napa and Sonoma wine country wildfires.

My name is Dan Collins, I act as a “fiduciary broker” in probates and trusts that involve real property assets.  To learn more, please visit my website: probte-realtor.biz

How Receivership can Protect Values in Matters of Trust & Probate – Fiduciary Broker Vlog #6

Ep6

Hi, I’m Dan Collins – a California licensed real estate broker with expertise in real property matters in Probates and Trusts. I am also a California licensed general contractor and receivership expert.  To learn more about receiverships protecting values, please visit my website: probate-realtor.biz

I want to tell you about how receivers can be useful in difficult trust or probate cases.

Family relationships can sometimes create toxic environments, especially amongst siblings who are beneficiaries to a Trust or Probate.  Let’s be truthful here; being asked to act as a Trustee or to administrator probate is a thankless duty that comes with real exposure to risk and liabilities.

In a family dynamic, it is usually the most responsible sibling who is appointed to act and administer a Trust or Probate after a loved one has died.

Usually the person who has stepped up to act as the Probate administrator or, a Trustee, has a family and a job with a full life and not enough hours in a day or week to accomplish everything they need and want in their life. Add to that life situation the burden of being an executor of an estate and you have a recipe for a lot additional stress.

Attorney Mike Hackard of Hackard Law and I have seen these dynamics countless times; stress can cause people to act in ways that are not becoming. In some people, stress can cause a person to become aggressive or emotionally unstable, which can lead to poor decision making.

Beneficiaries do not have a position of strength or leverage when that occurs with the person who is responsible to protect assets for their benefit.  Sometimes they feel they need to seek legal counsel if they suspect the Trustee or Executor is not acting in accordance to trust and, or, the last will and testament of a decedent, especially where legacy assets are involved, such as a business or income property.

When an Estate Executor is acting in ways that obviously are counter-productive to properly run a business or manage an income property, quick action is necessary to protect the legacy asset.   Appointment of a Receiver is an effective and powerful tool to employ in those situations. A Receiver has fiduciary duty to all parties, not just one side. There is no more equitable action than to seek the appointment of a qualified receiver to protect legacy assets.

The Receiver can step in quickly upon the court granting the appointment, assess the operations and make certain the business or the income property is adequately protected with insurance, licensing if necessary, and to create a temporary estate with all the powers of possession to provide an orderly takeover and protect all parties as well as the legacy asset.

The Estate Executor can also benefit from the appointment of a Receiver because it mitigates their exposure to liability if they have deliberately or, inadvertently taken action that if left uncorrected, may result in negative consequences — such as a monetary judgement if they were not removed from a role which they were not qualified to manage, but were placed in because the decedent named them as the Estate Executor.

I’m Dan Collins, a California licensed real estate broker, general contractor and receivership expert.  To learn more, please visit my website: probate-realtor.biz

 

How Receivership can Protect Values in Dissolution of Marriage – Fiduciary Broker Vlog #1


Hi, I’m Dan Collins – a California licensed real estate broker with expertise in real property matters in Probates and Trusts. I am also a California licensed general contractor and receivership expert.  To learn more about receiverships protecting values, please visit my website: probate-realtor.biz

Today I want to give you an example of how a Receiver can be useful in cases of divorce.

Let me tell you about a case I worked on involving a very unhappy divorce.  A married couple owned a California licensed property management business and, over a period of two years before the wife filed for divorce, her husband had been skimming profits.  This allowed the husband to create a “war chest” of cash, and to falsely mask the value of the business by underreporting net income.

Now theirs had been a long-term marriage, and the wife had started the business years before her husband came into the picture.  When the wife discovered the skimmed profits, she retaliated by emptying the client trust account. There were tenants moving out of homes and apartments who had security deposits at risk as well as client funds held in trust, which creates a very serious situation on many levels.

The attorneys representing the parties quickly realized they had a situation where the actions of the litigants were becoming destructive to the property management business, so they requested the appointment of a Receiver on an ex-part basis with the hope that the Receiver would, with a properly crafted Court Order, quickly step in and salvage the business.

As an impartial and neutral Receiver, I convinced the wife to return the unused trust monies, which allowed the Receiver to honor and return property management tenants’ security deposits and client trust funds.  Had a receiver not been appointed and been afforded the ability to take quick action, tenants and clients would surely have filed complaints with the California Bureau of Real Estate, which would have taken disciplinary action that may have resulted in the loss of both the husband and wife’s California real estate broker licenses.

Then, I counseled the husband that his skimming of business profits would end badly if he didn’t come clean and return the money, and fortunately he listened to reason.  By returning monies to the business, he avoided prosecution.

As the Receiver in the case, my job was to protect and preserve the business for the benefit of all, and fortunately I was able to do that.  The unhappy couple did finally get divorced but the business avoided the consequences of not being able to return tenant security deposits and client trust funds which preserved the husband and wife’s professional licenses. Protecting their professional licenses allowed them to divorce and still have their livelihood.

I’m Dan Collins, a California licensed real estate broker, general contractor and receivership expert.  To learn more, please visit my website: probate-realtor.biz